Related Literature of Sales and Inventory System

2506 Words Mar 20th, 2011 11 Pages
Inventory Systems Summary
According to the U.S. Small Business Administration, “Inventory refers to stocks of anything necessary to do business” (U.S. Small Business Administration, 2010, pp 1-2). The U.S. Small Business Administration publication describes what constitutes successful inventory management (balancing cost versus benefits of inventory), including
1) Maintaining a wide assortment without spreading the rapidly moving items too thin,
2) Increasing inventory turnover without sacrificing service,
3) Keeping stock low without sacrificing performance ,
4) Obtaining lower prices by making volume purchases,
5) Maintaining an adequate inventory without an excess of obsolete items.
Anyone in business must understand the business of
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The disadvantages to JIT include
1) Responsibility falls to the average worker for production control and productivity improvements
2) Close cooperation and mutual trust between the workforce and management;
3) Daily production workers to approximate the daily schedule
4) Cannot respond rapidly to changes (product design, product mix, or large demand volumes)
5) Large number of set-ups and frequent shipments of purchased items from suppliers
6) Requires parts to be produced and moved in the smallest containers possible
7) JIT is not well suited for irregularly used parts or special-order products
(just in time, n.d.).
Despite the disadvantages, JIT is a good fit for manufacturers with limited storage space and an extensive product line. Ordering materials as needed helps keep a positive cash flow. Bath and Body Works Inventory System
Bath and Body Works (BBW) is a franchise owned by Limited Brands Incorporated. BBW sells personal care, beauty, and home fragrance products sold under the Bath and Body Works, Company, Bigelow, and White Barn Candle brand names. Bath and Body Works is a very successful business and has grown to become one of the largest personal care retailers in the United States.
The inventory discussed below is that of a Bath and Body Works flagship store. At this store there are two franchises occupying the same space respectively, Bath and Body Works and White Barn Candle Company. Currently this store uses the perpetual inventory